My knowledge of the CBA is beyond rusty so please ignore this post if it's old news. I'm in the process of crunching salary numbers so I have a better idea of the free agent dynamics this off season. One of the first group of numbers I looked at is the difference between what a player going into their seventh season can make signing outright verses a sign and trade. The numbers are striking: I also kicked around on the internet until I found endorsement numbers, though the accuracy of the numbers is debatable. Forbes estimated James' 2008 take at 38 million with Jordan pulling in 45 million. Fortune magazine put James in 2007 at 25 million and Dwayne Wade at 12 million. The numbers point towards how much both the Bulls and James would profit from a signing. The real difference between signing outright and a sign and trade is the sixth year, not a major difference in salary. Lebron James is a workhorse who isn't injury prone, and there is no reason to believe he won't be playing six years from now. If Michael Jordan's numbers are really higher than Lebron's almost a decade after retirement, Lebron James has to be focusing on developing long term brand recognition, which seem to accompany championships and playing in a major market. As much as the Bulls need James, James also needs the Bulls. I wouldn't be surprised if James signed outright if it allowed the Bulls to acquire Chris Bosh in a sign and trade. The picture is much different for Dwayne Wade, a player who has shown some signs of being on the downside of his career. Wade has to pursue a sixth year. I wouldn't be surprised, indeed, if a lot of the noise Wade is making is to ensure that he is offered a sixth year from the Heat. I can't imagine the Bulls will make Wade a full-boat offer, no matter how good he has been. Jerry Reinsdorf has never been keen on awarding long term contracts to players with injury concerns, pitchers, etc. Chris Bosh's situation may fall somewhere in the middle. Bosh absolutely needs to get out of Canada to reach his marketing potential. At the same time, Bosh's endorsements may never equal the value of a sixth year, even if he isn't currently showing major signs of being on the downside of his career. What are the chances Bosh comes in a sign and trade and Lebron actually ends up being the second highest paid player on the team? It's not out of the realm of possibility, provided his ego allows it to happen. James could probably make up the ~2.5 million in good will and extra wins in his first three months alone.
SST - In a S&T scenario, the player is resigned by his team using the Bird Exception, which allows for 10.5% yearly raises vs. 8% if signed outright. It looks to me like a player with 7 years experience can sign a contract starting at $16,224,600. By my crude calculations, the difference is > $5M for the first 5 years of the contracts. If the 6th year is included for the Bird contract, the difference is close to $22M. If you extend the contract after the 5th season at max, the difference is $7M.
I think the point of all this is to help LeBron get the biggest contract possible out of the Bulls, the Cavs would have to facilitate a S&T.
One thing you need to factor in is that the player in question is going to get a sixth year under most circumstances anyway (unless they die or completely fall apart), so an apples to apples comparison is between a 5yr contract + the first year of his follow on extension or new contract and the six year contract. So for example, suppose Bosh finishes his five year contract in the example above, then signs a follow on deal that starts at $20M. Then he's only got to make $14.5M in endorsements etc. to offset the difference
Thanks. I jobbed this up pretty good. I'll go back and confirm. I was under the impression that the difference between the salaries was that S&T allowed for a compounding 10.5% salary increase, which otherwise it was a straight enlargement of the number at the beginning of the contract. I'm sure your 8% figure is correct. I would love to see a projection that takes into account the team's status for the next however many years, assuming a full boat for Rose and a Deng-like contract for Noah. It will probably control whether the Bulls are in the market for two free agents (one or both from a sign and trade) or one.
you can't compound...it's 8% or 10.5% of the first-year salary, and that raise is steady for the 5/6 years
